Richland County committee considers revolving loan fund to fill financing gap outside Columbia

The Richland County Office of Small Business Ad Hoc Committee on Tuesday heard a staff briefing on a proposed revolving loan fund intended to provide gap financing to small businesses located outside the City of Columbia.

Director Pam Green told the committee that the fund’s purpose would be “for those businesses that have difficulty obtaining financing through traditional measures,” and that the county would serve businesses in unincorporated Richland County while the City of Columbia’s program continues to serve city limits.

The program as presented would support job creation and retention, workforce and equity goals, and targeted revitalization in unincorporated areas. Green outlined three primary funding “buckets”: an Economic Development Administration (EDA) capitalization grant, Community Development Block Grant (CDBG) dollars with HUD requirements for low- and moderate-income beneficiaries, and a county general‑fund match. Green said EDA awards typically range “anywhere from 500,000 to 2,000,000” and that an application would require a five‑year lending strategy tied to the Central Midlands Council of Governments’ comprehensive economic development strategy.

Program mechanics described to the committee include collateralized loans, a suggested minimum loan of about $10,000 and a potential maximum consistent with EDA rules (noted in the briefing as $200,000). Green proposed tiered pricing, saying smaller loans could carry higher rates to mitigate risk, and described a balloon feature and adjustable terms to respond to market conditions. She also said administrative costs could be covered in part by allowable EDA expenses and program interest and fees.

Green told the committee the county would likely use a third‑party loan servicer to handle billing and collections, citing a typical range of $18–$25 per loan for servicing. She said the Office of Small Business would need designated staff — including a commercial loan officer and a compliance coordinator — and estimated about $120,000 annually for staffing to operate the program effectively.

A seven‑member loan review committee appointed by the council was proposed to provide underwriting review, pricing input and procedural recommendations; membership could include an attorney, bankers, small business owners and a county representative with staggered terms. Green said the review committee would work within baseline EDA guidelines but could recommend adjustments to fees and terms.

Committee members pressed staff for more specifics. Questions included whether the program would exclude businesses inside Columbia (Green confirmed eligibility would be limited to unincorporated Richland County), what mix of funding would meet EDA match requirements (Green said match typically must be at least 25 percent and that some CDBG dollars can count toward match), and what realistic capitalization would look like. Green said she envisions applying for “a million to a million and a half” from EDA and noted the county would need to budget the 25 percent match plus staffing and operating costs.

Members also raised risk and administration concerns: what happens on default, the county’s role if collateralized property is taken, how membership criteria for the review committee should be set, and whether staffing would be general‑funded or grant‑funded. Green said loans would be collateralized and that default remedies could include restructuring or, in some cases, sale of pledged assets; she acknowledged some defaults may be unavoidable. She also said the staff office would draft a five‑year lending strategy and ordinance language for the program and return with more detail.

Votes at a glance: - Approval of minutes from the Sept. 17, 2024 meeting — motion approved (Pugh: yes; Baron: yes; Newton: yes). - Adoption of the meeting agenda — motion approved (Pugh: yes; Baron: yes; Newton: yes). - Motion to enter executive session to discuss next steps on the disparity study — motion approved (Pugh: yes; Baron: yes; Newton: yes). No action was taken in executive session. - Motion to exit executive session — motion approved (Pugh: yes; Baron: yes; Newton: yes). - Motion to adjourn (item 5) — motion approved (Pugh: yes; Baron: yes; Newton: yes).

What’s next: staff said it will coordinate with the grants department to confirm available CDBG funds (the briefing referenced $50,000 currently tagged for the Office of Small Business), refine an EDA application and draft a five‑year lending strategy and ordinance language. Committee members requested additional comparative examples from jurisdictions similar to Richland County and a timeline and budget estimate showing how much county match and staffing would be required to meaningfully capitalize the fund.

The committee’s discussion focused on program design, capitalization and risk management; no final policy or ordinance was adopted at the meeting.